Exponent's Q2 2025: Navigating Contradictions in Regulatory Impact, Growth Expectations, and Demand Dynamics\n\nRegulatory environment and demand impact, reactive and proactive work growth, regulatory environment and demand impact, reactive business growth expectations, FTE growth expectations are the key contradictions discussed in Exponent's latest 2025Q2 earnings call.\n\nRevenue Performance: - Exponent reported flat revenues in the second quarter of 2025, exceeding expectations driven by disciplined execution and resilience in a dynamic environment. - Growth in dispute-related activities in construction, automotive, and medical device sectors, alongside proactive engagements in utility risk management, offset softer demand in chemical regulatory work.\n\nUtilization and Hiring: - Average technical full-time equivalent employees in the second quarter were 958, down 2% year-over-year, with a 5% to 6% headwind starting the year. - Headcount gap narrowed to 2% by the end of Q2, expected to be up in Q3 and Q4, driven by successful recruiting efforts and a compelling employee value proposition.\n\nEBITDA and Margins: - EBITDA for the second quarter decreased 7% to $37 million, producing a margin of 27.8% of net revenues, compared to 30.2% in the same period in 2024. - Decrease in margins due to lower utilization, increased operating expenses, and a reduction in miscellaneous income.\n\nReactive and Proactive Segments: - Reactive engagements, driven by litigation-related activities, grew by 7% year-on-year, offset by softer regulatory work. - Proactive engagements, led by risk management in the utility sector, showed similar growth rates, supported by expanding wildfire risk management work.

Exponent's Q2 2025: Navigating Contradictions in Regulatory Impact, Growth Expectations, and Demand Dynamics

Exponent reported flat revenues in Q2 2025, driven by disciplined execution and resilience amid dynamic market conditions. Growth in dispute-related activities across construction, automotive, and medical device sectors, along with proactive utility risk management, offset softer demand in chemical regulatory work. EBITDA declined 7% to $37 million due to lower utilization, increased operating expenses, and reduced miscellaneous income. Reactive engagements (litigation-related) grew 7% YoY, while proactive risk management in the utility sector showed similar growth.